by Vogue Building Services

Buying a Home after Bankruptcy – 2011, What you Have To Know to Get Approved

It is possible to purchase a home after filing for bankruptcy or going through a foreclosure if you take the time to plan ahead to make the task less difficult. The mortgage industry is still changing constantly and lenders are sticking with more strict standards so you must know precisely what you have to do prior to getting in.. Buying a Home After Bankruptcy You should first know what the normal waiting period is prior to approaching lenders with your application for a home loan. Under normal circumstances you will need to wait at least 2 years after bankruptcy (chapter 7 bankruptcies) and 3 years for closures. If you had a Chapter 13 bankruptcy and need to refinance a home you might be able to get a loan after 1 year of timely payments and with permission from a court appointed official. Evaluate your credit report to ensure that it is correct because any specifics of bankruptcy and foreclosures are frequently recorded incorrectly on credit reports. It’s easy to acquire a copy of your credit report and score from the three major credit bureaus online at an affordable price. If you need help understanding the report take it to your bank and get someone there who knows credit reports to go over it with you. Usually they can provide invaluable information explaining the particulars on the report and provide solutions to get you on the path of restitution. What Lenders Would like From Someone Who Has Undergone A Bankruptcy or Foreclosure Buy a Home After Foreclosure What the majority of the lenders are looking at when you’ve had a prior bankruptcy and or foreclosure is to evaluate if you have had any unfavorable actions on your credit report after the event to determine if you have truly gotten back on the right track in the handling of debt plus they want to see a few items reporting on the credit report since the bankruptcy showing paid as agreed for a minimum time period. I have found that many financial institutions are looking for a minimum of 12 months of paid as agreed activity on 2-3 accounts, also known as trade lines from the discharge date of the bankruptcy before considering granting a refinance. What to Do if your Credit is not At present up to Snuff for Home Refinancing If however you have had any additional negative occurrences apart from medical (they sometimes will over look some medical collections) it may be best to consider having a trustworthy credit repair company get the negative items taken off your report before you apply. I use the words reputable cautiously. Be sure that you investigate the credit repair company carefully. It will do you well to thoroughly check references before making use of those types of services as they can be good, but please do your homework before handing over your hard earned money. What Credit Scores are Needed to Refinance with Damaged Credit? With the uncertainty of the market place some lenders are willing to do refinances for customers with damaged credit who are holding scores as low as 530. This is generally for FHA Loans aimed towards primary residences only. If you have a credit score of 580 or lower you will have to have a larger down payment for purchases and refinances are limited to a lower loan to value. Usually lenders expect the borrower to have a few months reserve payments set aside (mortgage payments must include taxes and insurance). This will help to make certain that the mortgage companies do not make getting out of your fix any worse than it has to be.

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